Updated about 4 years ago on . Most recent reply
TAPPING EQUITY ON FORECLOSURE
Hi Guys,
I'm new to real estate investing and would like your opinion on how to consider the mortgage and cash flow.
I live and invest in Mexico, and just purchased an apartment in foreclosure for around $22k USD and its ARV is around 75k USD. I purchased all cash, therefore I have the entire equity of 75k and the banks here allow me to tap 70% of the equity on it. I could take the entire 70% (52k USD) to get into another deal I have my eyes on. However, if I take the entire 70%, my cash flow on the first property will be around $120.00 USD negative, but once the other project rent I could be cash flowing around $1,000.00 USD on the new property.
My question is, should I tap the entirety of the equity, even if that means being on the negative for around 6 to 8 months?